“Hawaii ranks 45th in Foreclosures” July 10th Article from Star-Bulletin.

The other is negative:

“Foreclosures up again from last year” Source: July 10th Honolulu Advertiser

What’s very curious is that they are reporting on the exact same set of statistics from a recent survey from Realtytrac.

The Glass Half Full Approach:
Let’s start with the positive one from the Star Bulletin (“Hawaii ranks 45th in Foreclosures”), the accurate one. This is the only article of the two that includes quotes from Realtytrac’s people. It’s encouraging that the writer who actually listened to the report’s author comes away with a more positive outlook.

The Star-Bulletin article states that Hawaii is 45th out of 50 States in the number of foreclosures and that foreclosures in June were down 17% from May. In the article, Realtytrac’s spokesman asserts that foreclosures aren’t a major threat to the market.

Headlines aside, we should take an objective, quantitative look at Hawaii’s foreclosure rate versus a market that is actually suffering. The difference is staggering: In Hawaii we only have 1 foreclosure for every 3,732 households. In Nevada, it is 1 for every 122 households, now that’s ugly!

The Glass is Half Empty Approach:
The dark side has spoken, and this time it’s the Honolulu Advertiser – oh no, foreclosures are up from a year ago! And what’s worse – they are up again. Not just up once, but up again, and again, and again. They had enough room. They could have added some additional ‘agains’. See, being up is not bad enough, being ‘up again’ is much worse. You must understand these things.

The article says that

“Hawaii’s foreclosure count continues what has been a steady rise in troubled mortgages.”

This is not the case. Recall that foreclosures are actually down 17% from May to June. Futhermore, Hawaii foreclosures were down 22% from April to May (Pacific Business News, June 13, 2008).

Fortunately, these numbers suggest a very encouraging trend. Unfortunately, these numbers make it harder for the reporter to tell the simplest, most sensational story-so of course they are omitted from the article, and a lot of readers are left in the dark.

Bottom line, foreclosures are not a big issue in Hawaii. We are consistently near the bottom in the number of foreclosures and they are too few to have an effect on our real estate market.

Post from: Hawaii Real Estate Reporter

Is the Glass Half Empty or Half Full? Newspapers Put Opposite Spins on Foreclosure Numbers

The article doesn’t mention that in June 2007 Honolulu set a record for median prices for single family homes ($685,000). We knew there was no way we would beat or even come close to that $685,000 record this June. We didn’t. No news here. But it does make exciting headlines.

Well, the media can have their day for June, but as the remainder of the 2008 reveals itself, the news isn’t going to be that bad. “Why?” you ask? Well, in September of 2007 the number of sales began to fall. Since the current sport is comparing stats to the previous year, the numbers are going to come closer together year to year as 2008 rolls on. We may even see an increase in the number of sales, year on year, before 2008 is over.

The same will happen for median prices. After the June 2007 record, July 2007 came in at $640,000. This is a number we could hit in July of 2008. And if we do, what is the media going to say? By the way, condos are still doing great.

Other than the excessive negativity of the headline, the remainder of the article put the numbers in a realistic perspective. This was a surprise. Why the disconnect between the headline and the content of the article? The reporter probably didn’t understand what Harvey Shapiro (Honolulu Board’s Economist) was saying.

And who was this lady trying to sell her own property? That particular anecdote reads more like a lesson on why For Sale By Owner doesn’t work, rather than an indicator of a poor market.

Despite this little dip, it’s not a good idea to wait to buy in Hawaii. With interest rates on the rise, any drop in prices is going to be more than offset by the added cost of higher interest. We know the human default position is ‘to wait’. Now is not the time to do so however. Get the good mortgage rates while you can. Property prices will take care of themselves – interest rates cost more money now!

Post from: Hawaii Real Estate Reporter

June Single Family Price Down from Last Year in Hawaii-Here’s Why We’re Still Okay